GIORDANO INTERNATIONAL LIMITED (Incorporated in Bermuda with limited liability) (Stock Code: 709)

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. GIORDANO INTERNATIONAL LIMITED (Incorporated in Bermuda with limited liability) (Stock Code: 709) ANNOUNCEMENT OF RESULTS FOR THE YEAR ENDED DECEMBER 31, 2016 Highlights Consolidated sales in 2016 were HK$5,145 million (2015: HK$5,381 million), a decrease of 4%, mainly due to closure of non-performing stores in Greater China and weakened Renminbi reducing the translated sales from Mainland China. Consolidated gross profit registered a minor decrease of 1%, supported by an improved gross margin of 1.8 percentage points to 59.4% (2015: 57.6%), due to pricing discipline and increased sales contribution from regions with higher margin. Comparable store gross profit was up by 2% against flat comparable store sales. Profit attributable to shareholders of the Company increased by 2% year-on-year to HK$434 million (2015: HK$426 million), while net profit margin rose to 8.4% from 7.9% in 2015. Inventory turnover days on costs were flat year-on-year at 78 days. At year-end, net cash and bank balances were HK$1,095 million (December 31, 2015: HK$1,076 million). Conversion rate of free cash flow from operations before tax to EBIT was 10 (2015: 12). The board of directors has recommended the payment of a final dividend of 15.0 HK cents per share (2015: 14.5 HK cents). Both basic and diluted earnings per share increased to 27.7 HK cents (2015: 27.1 HK cents). 1

TABLE OF CONTENTS Consolidated Income Statement... 3 Consolidated Statement of Comprehensive Income.... 3 Consolidated Balance Sheet... 4 Notes to the consolidated financial statements... 5 Management Discussion and Analysis of Group Results of Operations and Financial Condition.. 10 Outlook.... 25 Other Information... 26 List of tables: 1. Store portfolio... 10 2. Overview of Group results of operations... 11 3. Group sales by region... 11 4. Gross profit variance analysis by region... 13 5. Analysis of change in PATS... 15 6. Overview of Mainland China... 16 7. Overview of Hong Kong and Macau.... 17 8. Overview of Taiwan... 18 9. Overview of the rest of Asia Pacific region... 19 10. Store number of markets in the rest of Asia Pacific region... 19 11. Sales by markets in rest of Asia Pacific region.... 20 12. Overview of the Middle East... 21 13. Overview of South Korea... 22 14. Store number of overseas franchisees and non-consolidated subsidiaries... 22 15. Free cash flow from operations.... 23 16. Analysis of change in cash and bank balances... 23 17. System inventory... 24 List of charts: 1. Quarterly global brand sales and YOY change.............................................. 12 2. Quarterly Group CSS and CSGP change.... 12 3. Quarterly Group gross profit margin and YOY change.... 13 4. Sales and operating profit contribution by region... 15 5. Mainland China quarterly brand sales and YOY change... 17 6. Mainland China quarterly CSS and CSGP change... 17 7. Hong Kong and Macau quarterly CSS and CSGP change... 18 8. Taiwan quarterly CSS and CSGP change... 18 9. The rest of Asia Pacific quarterly CSS and CSGP change... 20 10. The Middle East quarterly CSS and CSGP change... 21 11. South Korea quarterly CSS and CSGP change... 22 2

The board of directors (the Board ) of Giordano International Limited (the Company ) presents the following audited annual results of the Company and its subsidiaries (the Group ) for the year ended December 31, 2016 together with comparative figures and explanatory notes. Consolidated Income Statement (In HK$ million, except earnings per share) Note 2016 2015 Sales 2 5,145 5,381 Cost of sales (2,090) (2,284) Gross profit 3,055 3,097 Other income and other gains, net 85 89 Distribution expense (2,299) (2,242) Administrative expense (273) (388) Operating profit 2, 3 568 556 Finance expense (1) Share of profit of joint ventures 43 42 Profit before taxation 610 598 Taxation 4 (122) (118) Profit for the year 488 480 Attributable to: Shareholders of the Company 434 426 Non-controlling interests 54 54 488 480 Earnings per share for profit attributable to shareholders of the Company Basic and Diluted (HK cents) 5 27.7 27.1 Consolidated Statement of Comprehensive Income (In HK$ million) 2016 2015 Profit for the year 488 480 Other comprehensive income: Items that may be reclassified to profit or loss Fair value change on available-for-sale financial asset 22 Exchange adjustments on translation of overseas subsidiaries, joint ventures and branches (35) (121) Total comprehensive income for the year 475 359 Attributable to: Shareholders of the Company 416 319 Non-controlling interests 59 40 475 359 3

Consolidated Balance Sheet As at December 31 (In HK$ million) Note 2016 2015 ASSETS Non-current assets Property, plant and equipment 221 239 Goodwill 546 546 Interest in joint ventures 480 503 Available-for-sale financial asset 35 13 Financial asset at fair value through profit or loss 28 28 Leasehold land and rental prepayments 192 205 Rental deposits 127 109 Deferred tax assets 50 48 4 1,679 1,691 Current assets Inventories 447 491 Leasehold land and rental prepayments 51 47 Trade and other receivables 7 544 542 Cash and bank balances 1,393 1,076 2,435 2,156 Total assets 4,114 3,847 EQUITY AND LIABILITIES Capital and reserves Share capital 79 79 Reserves 2,470 2,483 Proposed dividends 6 236 228 Equity attributable to shareholders of the Company 2,785 2,790 Non-controlling interests 182 176 Total equity 2,967 2,966 Non-current liabilities Put option liabilities 19 19 Deferred tax liabilities 103 111 122 130 Current liabilities Trade and other payables 8 538 559 Put option liabilities 102 102 Bank loans 298 Taxation 87 90 1,025 751 Total liabilities 1,147 881 Total equity and liabilities 4,114 3,847 Net current assets 1,410 1,405 Total assets less current liabilities 3,089 3,096

Notes to the consolidated financial statements: 1. Basis of preparation The consolidated financial statements have been prepared in accordance with Hong Kong Financial Reporting Standards ( HKFRS ) issued by the Hong Kong Institute of Certified Public Accountants ( HKICPA ). The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of available-for-sale financial asset, financial asset at fair value through profit or loss and derivative financial instruments, which are carried at fair value. The accounting policies and methods of computation used in preparing the financial information extracted from the audited consolidated financial statements are consistent with those followed in preparing the annual financial statements of the Group for the year ended December 31, 2015, except for the adoption of the following new and amended HKFRS, which are relevant to the Group s operation and are effective for accounting periods beginning on or after January 1, 2016. Accounting for acquisitions of interests in joint operations Amendments to HKFRS 11 Clarification of acceptable methods of depreciation and amortization Amendments to HKAS 16 and HKAS 38 Annual improvements to HKFRSs 2012-2014 cycle; and Disclosure initiative Amendments to HKAS 1 The adoption of these amendments did not have any impact on the current period or any prior period and is not likely to affect future periods. 2. Operating segments The Group determines its operating segments based on its development strategies and operational control. There are two major operating segments: Retail and Distribution and Wholesale Sales to overseas franchisees. Management manages the Retail and Distribution operating segment geographically and by brand. Geographically, the Retail and Distribution operating segment in Mainland China and the Middle East comprise directly operated stores ( DOS ) and franchised stores. Hong Kong and Macau, Taiwan and the rest of Asia Pacific do not have material local franchised stores. Group stores span most of Asia Pacific and the Middle East. There are also presently insignificant sales from franchised stores in south Asia, North America, and Central Europe. As for brands, the Group presently manages Giordano & Giordano Junior, Giordano Ladies, BSX and other less significant brands or third party licensed brands. Segment operating profit is before share of profit of joint ventures and taxation. This is the measurement basis reported to management and the senior decision-makers for the purpose of resource allocation and assessment of segment performance. 5

2. Operating segments (continued) Analysis of the Group s operating segment sales and operating profit by geographic regions is as follows. (In HK$ million) 2016 2015 Operating Operating Sales profit Sales profit Retail and Distribution Mainland China 1,285 102 1,451 90 Hong Kong and Macau 927 87 971 70 Taiwan 615 39 639 49 The rest of Asia Pacific 1,388 164 1,317 151 The Middle East 626 108 639 112 4,841 500 5,017 472 Wholesale sales to overseas franchisees 304 54 364 52 Segment results 5,145 554 5,381 524 0 Corporate functions 14 32 Finance expense (1) Share of profit of joint ventures 43 42 Profit before taxation 610 598 Further analysis of the Retail and Distribution operating segment by brand is as follows. (In HK$ million) 2016 2015 Operating Operating Sales profit Sales profit Retail and Distribution Giordano & Giordano Junior 4,130 422 4,302 414 Giordano Ladies 401 65 393 43 BSX 147 9 167 1 Others 163 4 155 14 6 0 4,841 500 5,017 472 The Company has its domicile in Hong Kong. Sales to external customers from Hong Kong and Macau are HK$1,231 million (2015: HK$1,335 million), Mainland China HK$1,285 million (2015: HK$1,451 million) and external customers from other markets HK$2,629 million (2015: HK$2,595 million). Inter-segment sales of HK$1,012 million (2015: HK$1,076 million) have been eliminated upon consolidation. Depreciation and amortization charged related to Mainland China was HK$26 million (2015: HK$36 million), Hong Kong and Macau HK$15 million (2015: HK$17 million), Taiwan HK$18 million (2015: HK$16 million), the rest of Asia Pacific HK$43 million (2015: HK$39 million) and the Middle East HK$24 million (2015: HK$26 million). Income tax expense charged related to Mainland China was HK$14 million (2015: HK$24 million), Hong Kong and Macau HK$11 million (2015: HK$11 million), Taiwan HK$6 million (2015: HK$7 million), the rest of Asia Pacific HK$47 million (2015: HK$40 million) and the Middle East HK$9 million (2015: HK$9 million).

2. Operating segments (continued) Analysis of the Group s segment assets by geographic regions is as follows: Segment assets (In HK$ million) 2016 2015 Segment assets Mainland China 775 967 Hong Kong and Macau 1,064 636 Taiwan 184 179 The rest of Asia Pacific 658 617 The Middle East 840 856 3,521 3,255 Interest in joint ventures 480 503 Available-for-sale financial asset 35 13 Financial asset at fair value through profit or loss 28 28 Deferred tax assets 50 48 Total assets 4,114 3,847 The total of non-current assets other than financial instruments and deferred tax assets located in Hong Kong is HK$197 million (2015: HK$201 million); Mainland China, HK$72 million (2015: HK$91 million); and other markets, HK$1,297 million (2015: HK$1,310 million). 3. Operating profit The operating profit is stated after charging: (In HK$ million) 2016 2015 Amortization of leasehold land prepayments 8 8 Auditor s remuneration 6 6 Depreciation of property, plant and equipment 118 126 Operating lease rentals in respect of land and buildings Minimum lease payments 861 892 Contingent rent 229 224 Management fee 60 54 Provision for obsolete stock and stock written off 5 Staff costs 900 886 7

4. Taxation Hong Kong profits tax is calculated at the rate of 16.5% (2015: 16.5%) on the estimated assessable profits for the year. Income tax on profits assessable outside Hong Kong is calculated at the rates applicable in the respective jurisdictions. (In HK$ million) 2016 2015 Current income tax Hong Kong 20 20 Outside Hong Kong 72 70 Over provision in prior years (2) Withholding tax on profit distribution from subsidiaries and joint venture 27 37 8 117 127 Deferred tax Origination and reversal of temporary differences 5 (7) Over provision in prior years (2) 5 (9) Taxation charge 122 118 This charge excludes the share of joint ventures taxation for the year of HK$11 million (2015: HK$11 million). The share of profit of joint ventures in the consolidated income statement is after income taxes accrued in the appropriate income tax jurisdictions. 5. Earnings per share The calculations of basic and diluted earnings per share are based on the consolidated profit attributable to shareholders of the Company for the year of HK$434 million (2015: HK$426 million). The basic earnings per share is based on the weighted average of 1,570,561,403 shares (2015: 1,570,283,230 shares) in issue during the year. The diluted earnings per share is based on 1,571,089,251 shares (2015: 1,571,667,143 shares) which is the total of the weighted average of 1,570,561,403 shares (2015: 1,570,283,230 shares) in issue during the year and the weighted average of 527,848 shares (2015: 1,383,913 shares) deemed to be issued if all outstanding share options granted under the share option schemes of the Company had been exercised. 6. Dividends (In HK$ million) 2016 2015 Interim dividend declared and paid of 12.5 HK cents (2015: 12.5 HK cents) per share 196 196 Final dividend proposed after the balance sheet date of 15.0 HK cents (2015: 14.5 HK cents) per share 236 228 432 424 At the Board meeting on March 9, 2017, the directors of the Company recommended the payment of a final dividend of 15.0 HK cents per share. The proposed dividend has not been recognized as a liability at the balance sheet date. The amount of proposed dividend was based on the shares in issue as at the proposed date.

7. Trade and other receivables (In HK$ million) 2016 2015 Trade receivables 274 275 Less provision for impairment (8) (11) Trade receivables, net 266 264 Aging analysis from the invoice date net of provision for impairment is as follows: 0 30 days 180 187 31 60 days 50 42 61 90 days 17 13 Over 90 days 19 22 266 264 Other receivables, including deposits and prepayments 278 278 544 542 Trade receivables comprise mainly amounts due from wholesale customers and retail proceeds due from department stores. The Group normally allows a credit period of 30-60 days. 8. Trade and other payables (In HK$ million) 2016 2015 Trade payables 205 232 Aging analysis is as follows: 0 30 days 185 186 31 60 days 9 32 61 90 days 4 8 Over 90 days 7 6 205 232 Other payables and accrued expense 333 327 538 559 9

MANAGEMENT DISCUSSION AND ANALYSIS OF GROUP RESULTS OF OPERATIONS AND FINANCIAL CONDITION The following commentaries refer to year-on-year ( YOY ) comparison of the year ended December 31, 2016 and 2015 unless otherwise stated. OVERVIEW The Group is an international apparel retailer with a portfolio of brands, including proprietary Giordano and Giordano Junior, Giordano Ladies, BSX, other less significant brands and nonproprietary third party brands under license. We operated 2,397 stores (equivalent to 2,318,600 sq. ft. of retail floor space) in over 30 countries as at December 31, 2016, of which 1,254 were standalone stores. The majority of stores were in Greater China, South Korea, South East Asia and the Middle East. We manage our store portfolio by geographic region and by distribution channel. We target to expand our footprint in South East Asia and franchise network in China, and the retail floor space from these regions increased by 6% as at year-end. Consolidated sales 1 for the year ended December 31, 2016 were HK$5,145 million. Gross profit margin was 59.4%. Group comparable store gross profit 2 ( Group CSGP ) (measures subsidiaries only) was up by 2% despite flat Group comparable store sales 2 ( Group CSS ). Profit attributable to shareholders of the Company ( PATS ) was HK$434 million. Net cash and bank balances were HK$1,095 million. Table 1: Store portfolio Store numbers at December 31 Retail floor space (sq. ft. in thousands) at December 31 2016 2015 2016 2015 Retail and Distribution Mainland China Direct-operated stores 357 374 300 330 Franchised stores 562 517 453 418 Hong Kong and Macau 73 71 82 90 Taiwan 203 205 197 202 The rest of Asia Pacific 581 586 578 559 The Middle East 191 202 224 248 Overseas franchisees 430 416 485 456 Total 2,397 2,371 2,319 2,303 10

RESULTS OF OPERATIONS Table 2: Overview of Group results of operations Full Year Second Half First Half (In HK$ million) 2016 2015 Change 2016 2015 Change 2016 2015 Change Group sales 5,145 5,381 (4%) 2,613 2,645 (1%) 2,532 2,736 (7%) Gross profit 3,055 3,097 (1%) 1,547 1,531 1% 1,508 1,566 (4%) Gross profit margin 59.4% 57.6% 1.8pp 59.2% 57.9% 1.3pp 59.6% 57.2% 2.4pp Operating expenses (2,572) (2,630) (2%) (1,288) (1,291) Flat (1,284) (1,339) (4%) Operating profit 568 556 2% 301 281 7% 267 275 (3%) Operating margin 11. 10.3% 0.7pp 11.5% 10.6% 0.9pp 10.5% 10.1% 0.4pp EBITDA 748 743 1% 395 373 6% 353 370 (5%) PATS 434 426 2% 230 218 6% 204 208 (2%) Net profit margin 8.4% 7.9% 0.5pp 8.8% 8.2% 0.6pp 8.1% 7.6% 0.5pp Global brand sales 3 6,740 6,810 (1%) 3,446 3,446 Flat 3,294 3,364 (2%) Global brand gross profit 3 4,118 4,042 2% 2,125 2,049 4% 1,993 1,993 Flat Group CSS Flat 4% Flat Flat (1%) 9% Group CSGP 2% 4% 3% 1% Flat 8% Free cash flow from operations 505 644 (22%) 246 287 (14%) 259 357 (27%) Net cash and bank balances at period end 1,095 1,076 2% 1,084 1,029 5% Inventories at period end 447 491 (9%) 392 453 (13%) Inventory turnover on cost ( ITOC ) (days) 4 78 78 Flat 70 70 Flat Table 3: Group sales by region (In HK$ million) 2016 2015 Change Change (at constant exchange rates) Mainland China 1,285 1,451 (11%) (7%) Hong Kong & Macau 927 971 (5%) (5%) Taiwan 615 639 (4%) (3%) The rest of Asia Pacific 1,388 1,317 5% 6% The Middle East 626 639 (2%) (2%) Retail and Distribution 4,841 5,017 (4%) (2%) Wholesale sales to overseas franchisees 304 364 (16%) (16%) Total 5,145 5,381 (4%) (3%) Sales Sales by geographic region Consolidated group sales declined by 4%, but would have only been down by 3% if translated at constant exchange rates. Sales reduction in Greater China explained mostly to the decline in consolidated sales. Group CSS was flat amidst subdued global economic growth that stymied consumer sentiment. The marked slowdown of the Mainland Chinese economy largely contributed towards the 2% CSS drop in this region. This, coupled with the closure of non-performing stores resulting from the rationalization of the shop portfolio, and the depreciation of the Renminbi ( RMB ) against the Hong Kong dollar ( HKD or HK$ ) all resulted in the reduction in reported sales there by 11%. The resilient team in Hong Kong continued to weather the adverse retail environment and stabilized CSS. The sales decline in Hong Kong was mainly due to net shop closures. In Taiwan, the acute economic slowdown, falling consumer confidence as well as plummeting Mainland Chinese tourist numbers have all adversely affected the reported sales. 11

Translated at constant exchange rates, the rest of Asia Pacific recorded an increase in sales of 6%, attributable to regional CSS growth of 5% and net store gains. Mixed currency movements in this region contained the reported sales growth to 5% in the year under review. Thailand and Indonesia were the two biggest sales drivers in the rest of Asia Pacific region in 2016, sales elevated by 21% and 11%, respectively. In the Middle East, the unsettled regional economies have not been conducive to consumer spending. Efforts to stimulate the economies through infrastructure and tourism projects continue to be stymied by the effects of plunging oil prices, which fell to below US$50 per barrel for the first time since 2009. Regional CSS plummeted 15% in the first quarter. We reacted by revamping the merchandise mix and promotion strategies that together helped narrow down regional CSS decline to 3% for the full year. Sales by brand With respect to the core Giordano brand, 72% of sales derived from menswear, 23% from womenswear and 5% from junior wear. Menswear brand CSS increased by 3%, and brand CSGP rose further to 6%. Polos continued to be our strongest product category. Womenswear, however, recorded a drop of 3% in brand CSS. In addition to selling through multi-brand stores, there were 42 (2015: 46) womenswear counters in Mainland China and Thailand as at December 31, 2016. Our premium womenswear brand, Giordano Ladies, recorded an increase in brand CSS by 3% and brand CSGP by 4%. In particular, CSS in the South East Asia region surged by 17%. Management will expand the brand s global footprint beyond Greater China. Chart 1: Quarterly global brand sales and YOY change (In HK$ million, at 2016 exchange rates) (%) 2,500 2,000 1,500 1,000 500 0 2% 2% 1,735 1,929 1,972-1% 1,629 1,669 1,517 1,625 1,474-4% -5% -3% 1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016 4Q 2016 3% 2% 1% -1% -2% -3% -4% -5% -6% Global brand sales Global brand sales growth Chart 2: Quarterly Group CSS and CSGP change 15% 1 5% -5% 12% 7% 8% 8% 6% 7% 5% 2% 3% -3% 1% -2% -4% -2% -3% 1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016 4Q 2016 Group CSS change Group CSGP change 12

Gross profit While the Group makes its purchases from a RMB-based supply chain, its markets receive retail proceeds in local currencies. The relative strengthening or weakening of local currencies of each market against RMB will improve or reduce the gross profit and the gross profit margin in each market. As the Group reports its results in HKD, the relative strengthening or weakening of local currencies against HKD will also increase or decrease the Group s reported income statements when translating the results of operations of each market into HKD. Although consolidated sales decreased by 4%, consolidated gross profit decreased by only 1% to HK$3,055 million (2015: HK$3,097 million). This was attributable to the Group s emphasis on defending gross margin through disciplined merchandising and stringent pricing. Group gross margin was up by 1.8 percentage points to 59.4% (2015: 57.6%). Group average selling price rose by 3%, primarily due to the adjustment of selling prices in the rest of Asia Pacific region from the latter half of 2015 when their currencies depreciated sharply against the RMB. Better market mix from the increased sales contribution of this region further enhanced the Group average selling price. The Group reduced average product cost by 2%, owing to the depreciation of RMB. Nevertheless, the increased costs of higher quality fabrics and trims offset a portion of these cost saving. Sales volume was down by 5%, mainly due to shop closures in Mainland China and Hong Kong. Chart 3: Quarterly Group gross profit margin and YOY change Gross profit margin (%) (%) 7 6 5 4 3 2 1 55.2% -1.7% 2.5% 59.5% 58. 57.8% 57.7% 0.8% 0.1% -0.9% 61.5% 2. 58.3% 60. 0.3% 2.2% 4% 3% 2% 1% -1% 1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016 4Q 2016-2% Quarterly Group gross profit margin Quarterly YOY change Table 4: Gross profit variance analysis by region (In HK$ million) 2015 gross profit Average product cost Average selling price Volume Exchange impact Miscellaneous 2016 gross profit Mainland China 776 (5) 37 (71) (38) (1) 698 Hong Kong & Macau 646 (2) 29 (49) 16 640 Taiwan 374 14 (19) 2 (8) (1) 362 The rest of Asia Pacific 773 (28) 100 (10) (6) 829 The Middle East 414 16 (14) (2) (1) 413 Wholesales & Intercompany 114 (22) (28) (6) 55 113 Market mix (8) 38 (30) Group 3,097 (35) 143 (166) 19 (3) 3,055 13

Other income and other gains, net Other income and other gains mainly consisted of royalty income, rental income, gain from disposal of property, plant and equipment as well as interest income. Other income and other gains dropped by 4% or HK$4 million due to fewer units of staff quarters sold in the year under review. Operating expenses The Group remains vigilant in its spending. There was a reduction in operating expenses by HK$58 million or 2%. Operating expense ratio increased by 1.1 percentage points from 48.9% to 50., largely due to lower consolidated sales. With the uplift in gross profit margin of 1.8 percentage points, operating expenses to gross profit decreased by 0.7 percentage points to 84.2%, enhancing our operating margin by 0.7 percentage points to 11. YOY. Rental expense decreased by 3% due to the closure of non-performing stores, particularly in Mainland China, and rental reduction initiatives, although this was largely offset by expansion of retail space by 3% in the South East Asia region. Staff expense to sales was 17.5% (2015: 16.5%), attributable to salary increments and the increase in statutory staff benefits in certain markets. Advertising and marketing expenses declined by 5% with fewer global advertising campaigns this year. The Group will continue to execute impactful marketing programs in 2017 where appropriate. Shop overhead expenses, comprising shop depreciation, utilities, credit card charges and other miscellaneous expenses, also declined by 7%. Operating profit The Group s operating profit was better in the second half of the financial year, increased by 7% YOY as compared to 3% decline in the first half. The Middle East recorded the highest return on sales in the Group with an operating margin of 17.3% (2015: 17.5%), owing largely to its strong brand equity. Although there was an initial blip in the first quarter when CSS plummeted by 15%, and it rebounded in ensuing quarters. Greater China made up 55% of the Group s consolidated sales, but due to its relatively low operating margin among the markets, it only contributed 4 of the Group s operating profit. Upon rationalization of store portfolio and gross profit margin uplift, we managed to increase Greater China s operating margin by 1.3 percentage points to 8.1% in the year under review. Management expects the operating margin in Greater China will continue to improve. 14

Chart 4: Sales and operating profit contribution by region Sales contribution by region Operating profit contribution by region The Middle East 12% The rest of Asia Pacific 27% Wholesales to overseas franchisees 6% Taiwan 12% Mainland China 25% Hong Kong & Macau 18% The Middle East 19% Corporate functions Wholesales 2% to overseas franchisees 1 The rest of Asia Pacific 29% Mainland China 18% Hong Kong & Macau 15% Taiwan 7% Taxation Taxation amounted to HK$122 million (2015: HK$118 million), representing an effective tax rate of 20. (2015: 19.7%). Profit attributable to shareholders of the Company Profit attributable to shareholders of the Company ( PATS ) was up by 2% to HK$434 million (2015: HK$426 million). Net profit margin increased by 0.5 percentage points from 7.9% to 8.4%, attributable to strengthened gross profit margin, which compensated the rising operating costs, in particular, staff costs and statutory staff benefits. At constant exchange rates, PATS would have been HK$443 million, an increase of 4% YOY. The difficulties in Taiwan and the Middle East markets weighing on the profits there were entirely offset by the growth in other markets. Table 5: Analysis of change in PATS (In HK$ million) Reported 2015 PATS 426 Increase in profit from Mainland China 17 Increase in profit from Hong Kong and Macau 17 Decrease in profit from Taiwan (9) Increase in profit from the rest of Asia Pacific 14 Decrease in profit from the Middle East (4) Increase in share of profit of South Korea 3 Increase in profit from wholesales 2 Taxation, non-controlling interests and corporate functions (23) 2016 PATS without currency translation difference 443 Currency translation difference (9) Reported 2016 PATS 434 15

The following market-specific comments by management are in local currencies or, if in HKD, are at constant exchange rates to remove distortions from the translation of results of operations and financial condition from local currencies to HKD. The figures have not removed the impact on imported product cost contracted at non-local currencies. Mainland China Table 6: Overview of Mainland China Full Year Second Half First Half (In RMB million) 2016 2015 Change 2016 2015 Change 2016 2015 Change Total sales 1,103 1,182 (7%) 564 570 (1%) 539 612 (12%) DOS 785 865 (9%) 396 413 (4%) 389 452 (14%) Wholesale to franchisees 318 317 Flat 168 157 7% 150 160 (6%) Total brand sales 1,310 1,415 (7%) 643 667 (4%) 667 748 (11%) DOS 785 865 (9%) 396 413 (4%) 389 452 (14%) Franchised stores 525 550 (5%) 247 254 (3%) 278 296 (6%) CSS (2%) 6% (1%) Flat (3%) 12% Gross profit 599 632 (5%) 305 310 (2%) 294 322 (9%) Gross profit margin 54.3% 53.5% 0.8pp 54.1% 54.4% (0.3pp) 54.5% 52.6% 1.9pp CSGP Flat 7% 1% 3% (1%) 1 Operating expenses (526) (581) (9%) (262) (278) (6%) (264) (303) (13%) Operating profit 87 73 19% 47 40 18% 40 33 21% Operating margin 7.9% 6.2% 1.7pp 8.3% 7. 1.3pp 7.4% 5.4% 2.0pp Number of stores at period end 919 891 28 896 928 (32) DOS 357 374 (17) 360 435 (75) Franchised stores 562 517 45 536 493 43 Commencing in the second half of 2015, we revamped our store portfolio by exiting non-performing stores. This affected total sales comparison such that total sales were down doubledigit in the first half of 2016 despite comparable store sales only declined by 3%. In the second half of the year, total sales became more comparable; coupled with the expansion of our franchise network, the region s total sales modestly decreased by 1% YOY. Amid the steady cooling of the Chinese economy, we managed to report flat CSGP. Gross profit margin was up by 0.8 percentage points to 54.3%, primarily due to the increase in average selling price of 3%. We refined the product mix by offering higher quality products that yielded higher selling prices and better margins. With the support of a flexible supply chain, we were able to under-buy and stock less, reducing the pressure to markdown at season-end. Operating profit rose by 19% in local currency terms, and operating margin improved by 1.7 percentage points. This is the combination of gross profit margin improvement and better channel mix from our franchise business, which yielded higher returns. Profit drivers from this region include the expansion of our franchise network in third- and fourthtier cities and e-business. Sales from e-business rose by 13% with its sales contribution to regional brand sales increasing to 15% (2015: 13%). Our sales in third-party platforms both surged by more than 2 after consolidation of our online platforms. Management will continue to invest resources to support e-business growth. This year we will move and merge our Mainland China distribution center and e-business warehouse under one roof to enhance operating efficiencies and inventory control. 16

Chart 5: Mainland China quarterly brand sales and YOY change (In RMB million) 500 1% 400 415-3% 394 369-3% -4% 300 333 298 382 273 261 200-1 100-11% -11% -11% 0 1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016 4Q 2016 (%) 2% -2% -4% -6% -8% -1-12% Total brand sales Total brand sales growth Chart 6: Mainland China quarterly CSS and CSGP change 15% 1 5% -5% -1 14% 1 1 7% 9% 4% 4% 2% 3% -2% -3% -2% -3% -6% -6% 1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016 4Q 2016 CSS change CSGP change Hong Kong and Macau Table 7: Overview of Hong Kong and Macau Full Year Second Half First Half (In HK$ million) 2016 2015 Change 2016 2015 Change 2016 2015 Change Total sales 927 971 (5%) 470 492 (4%) 457 479 (5%) CSS Flat 7% 2% 4% 1% 8% Gross profit 640 646 (1%) 327 325 1% 313 321 (3%) Gross profit margin 69. 66.5% 2.5pp 69.6% 66.1% 3.5pp 68.5% 67. 1.5pp CSGP 3% 6% 7% 4% 2% 8% Operating expenses (562) (579) (3%) (285) (288) (1%) (277) (291) (5%) Operating profit 87 70 24% 49 38 29% 38 32 19% Operating margin 9.4% 7.2% 2.2pp 10.4% 7.7% 2.7pp 8.3% 6.7% 1.6pp Number of stores at period end 73 71 2 70 74 (4) Sales recorded a decrease of 5% despite CSS being flat, due mainly to closure of stores that took place in 2015. Trading conditions in Hong Kong s retail industry were challenging, but our resilient operations team managed to increase CSGP quarter-to-quarter. Gross profit margin enhanced by 2.5 percentage points to 69., driven by the increase in average selling price by 3%. This was the result of better product mix from higher margin products and successful marketing campaigns, which increased store footfall. Rental expense to sales ratio receded by one percentage point, mainly due to the exit from high rent locations coupled with successful rental reductions. While the rents for street stores may well be declining, shopping mall rents are continuing to rise. Management continues to evaluate the economics of prime locations and plans to open new stores when occupancy costs return to reasonable levels. Staff costs to sales ratio increased by 2.0 percentage points as we enhanced our salary competitiveness in the market. Supported by strong gross margin growth in the second half of the financial year and strict control of other operating expenses, we widened the operating profit growth and reported a hike of 29% in the second half or 24% for the full year. 17

Chart 7: Hong Kong and Macau quarterly CSS and CSGP change 14% 12% 1 8% 6% 4% 2% -2% 12% 12% 9% 11% 9% 5% 5% 3% 4% 2% 3% 1% 1% 1% -1% 1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016 4Q 2016 CSS change CSGP change Taiwan Table 8: Overview of Taiwan Full Year Second Half First Half (In NTD million) 2016 2015 Change 2016 2015 Change 2016 2015 Change Total sales 2,571 2,637 (3%) 1,200 1,267 (5%) 1,371 1,370 Flat CSS (3%) 1% (4%) (8%) (4%) 12% Gross profit 1,514 1,543 (2%) 728 742 (2%) 786 801 (2%) Gross profit margin 58.9% 58.5% 0.4pp 60.7% 58.6% 2.1pp 57.3% 58.5% (1.2pp) CSGP (3%) Flat (1%) (9%) (5%) 11% Operating expenses (1,354) (1,355) Flat (658) (673) (2%) (696) (682) 2% Operating profit 162 201 (19%) 67 76 (12%) 95 125 (24%) Operating margin 6.3% 7.6% (1.3pp) 5.6% 6. (0.4pp) 6.9% 9.1% (2.2pp) Number of stores at period end 203 205 (2) 211 201 10 The stagnant economy in Taiwan has dampened consumer confidence and continued to pose a great challenge to our business there. A recent publication by the National Central University notes that the consumer confidence index in December 2016 had fallen to its lowest since October 2013. Fullyear CSGP dropped by 3% despite successfully narrowing the CSGP drop to 1% in the second half of the financial year. We responded to the market weakness by reshaping the product mix to offer more price-competitive products. This also helped restrict the decrease in operating profit in the second half of the year. Full year operating profit shrank by 19% with operating margin down from 7.6% to 6.3%. We opened net ten stores in the first half of the financial year, but they failed to deliver expected sales and adversely affected the operating margin. Management will carefully evaluate Taiwan s expansion plans and non-performing stores, especially in the absence of any imminent signs of growth. Chart 8: Taiwan quarterly CSS and CSGP change 2 15% 1 5% -5% -1-15% -2 18% 16% 7% 5% -1% -3% -3% -5% -2% -4% -13% -8% -14% -5% -4% 1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016 4Q 2016 CSS change CSGP change 18

The rest of Asia Pacific Table 9: Overview of the rest of Asia Pacific region Full Year Second Half First Half (In HK$ million, translated at constant exchange rates) 2016 2015 Change 2016 2015 Change 2016 2015 Change Total sales 1,400 1,317 6% 713 679 5% 687 638 8% CSS 5% 5% 4% 3% 5% 9% Gross profit 837 773 8% 432 391 1 405 382 6% Gross profit margin 59.8% 58.7% 1.1pp 60.6% 57.6% 3.0pp 59. 59.9% (0.9pp) CSGP 6% 4% 7% 2% 4% 7% Operating expenses (677) (622) 9% (335) (309) 8% (342) (313) 9% Operating profit 166 151 1 97 83 17% 69 68 1% Operating margin 11.9% 11.5% 0.4pp 13.6% 12.2% 1.4pp 10. 10.7% (0.7pp) Number of stores at period end 581 586 (5) 582 559 23 Table 10: Store number of markets in the rest of Asia Pacific region December 31 2016 At December 31 2015 Indonesia 237 224 Thailand 159 153 Malaysia 90 90 Singapore 45 47 India 29 49 Australia 20 22 Cambodia 1 1 Total number of stores 581 586 Total retail floor space (sq. ft.) 577,700 558,800 The depreciation of the RMB, especially in the second half of the financial year, benefited the import costs from this region as most production orders were settled in RMB. The gross profit margin enhanced by 1.1 percentage points, predominately from the 3.0 percentage points increase in gross profit margin from the second half of the financial year. Currencies in this region have been gradually appreciating to the Group reporting currency, HKD. Profitability declined by HK$1 million (2015: HK$18 million) in the year under review due to the translation of operating results in local currencies to HKD. There was still negative impact to reported results when translating the operating results from these markets into HKD, but the impact was smaller compared to last year. Commentaries on key markets in this region are as follows: Against a high third quarter base when Singapore celebrated its Golden Jubilee last year that attracted unusually high store footfall, full year CSS eventually dropped by only 1%. As we trimmed down the stock level, we had less stock clearance pressure. Therefore, gross profit margin increased by 1.1 percentage points, attributable to a 3% increase in average selling price. The Malaysian government introduced Goods and Services Tax in April 2015. This encouraged unusually high consumption prior to the implementation, creating a rather high comparable base. CSGP was up by 2% although CSS was down by 3%, primarily due to the increase in gross profit margin by 3.8 percentage points, driven by the increase in average selling price by 14%. This was largely due to the alleviation of markdown pressure after successfully reducing stock levels, as well as the adjustment of selling prices to compensate for the unfavorable impact of import costs denominated in RMB when the Malaysia Ringgit depreciated quite heavily against RMB in 2015. Owing to the achievement of high gross profit margin growth, operating profit increased by 5% YOY in current exchange rates, or 11% in local currency terms. 19

With 237 shops as at year-end, Indonesia is our largest market in South East Asia. Its sales accounted for 35% (2015: 34%) of our retail sales value in the rest of Asia Pacific region. In Indonesia, we run both Giordano brand and licensed brand DOS and in the year under review, their performance varied. Giordano brand CSS expanded by 5% whereas licensed brand CSS slipped by 27%. Supported by GDP growth of 5% in the year under review and better merchandise assortment, Giordano brand CSS increased by the same extent. On the other hand, licensed brands sales decline was primarily due to upward adjustments of licensor-directed retail prices and delayed shipments of merchandise. The licensor has since revised its pricing guideline in the middle of the financial year. We did see a gradual improvement in the CSS, although we have yet to see a noticeable rebound. With the net addition of 13 stores in the past 12 months, reported sales increased by 11%. However, escalated operating expenses, particularly rental expenses and statutory staff benefits, brought down operating margin by 2.3 percentage points, resulting in a 3% decline in operating profit. The local management team has built one of the strongest Giordano brand image among all markets, providing a solid foundation to keep the business on a growth trajectory. Thailand reported an overwhelmingly strong performance in the year under review, with CSS and CSGP surging by 2 and 21%, respectively. Operating profit translated at constant exchange rate also surged by 64%, leveraged by increased sales and controlled operating expenses. CSS in Australia saw a double-digit dip in the first half of the financial year. We responded by restructuring the sales force there and managed to narrow down CSS decline to 8% for the full year. Nevertheless, operating loss still widened YOY. Management continues to assess if this market fits in the Group s ongoing strategy. Table 11: Sales by markets in rest of Asia Pacific region Sales at constant exchange rate CSS CSGP (In HK$ million) 2016 2015 Change 2016 2015 2016 2015 Singapore 309 317 (3%) (1%) 1 (1%) 9% Indonesia 486 444 9% 5% 1% 4% (2%) Malaysia 183 184 (1%) (3%) (7%) 2% (8%) Thailand 327 262 25% 2 15% 21% 15% Australia 78 84 (7%) (8%) 8% (9%) 6% India 10 21 (52%) (39%) (15%) (39%) (18%) Cambodia 7 5 4 42% N/A 41% N/A Total 1,400 1,317 6% 5% 5% 6% 4% Chart 9: The rest of Asia Pacific quarterly CSS and CSGP change 15% 11% 14% 1 5% -5% 6% 6% 7% 7% 4% 8% 6% 6% 5% 4% -2% -1% 1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016 4Q 2016 CSS change CSGP change 20

The Middle East Table 12: Overview of the Middle East Full Year Second Half First Half (In HK$ million, translated at constant exchange rates) 2016 2015 Change 2016 2015 Change 2016 2015 Change Total sales 625 639 (2%) 310 319 (3%) 315 320 (2%) CSS (3%) (3%) (3%) (5%) (4%) 1% Gross profit 413 414 Flat 200 209 (4%) 213 205 4% Gross profit margin 66.1% 64.8% 1.3pp 64.5% 65.5% (1.0pp) 67.6% 64.1% 3.5pp CSGP (1%) 1% (3%) Flat (1%) 2% Operating expenses (306) (302) 1% (152) (157) (3%) (154) (145) 6% Operating profit 108 112 (4%) 48 52 (8%) 60 60 Flat Operating margin 17.3% 17.5% (0.2pp) 15.5% 16.3% (0.8pp) 19. 18.8% 0.2pp Number of stores at period end 191 202 (11) 196 202 (6) In the Middle East, unsettled regional economies have not been conducive to consumer spending. Efforts to stimulate the economies through infrastructure and tourism projects continue to be stymied by the effects of plunging oil prices, which fell to below US$50 per barrel for the first time since 2009, and government austerity measures. Regional CSS plummeted 15% in the first quarter. We reacted by revamping the merchandise assortment and promotion strategies that together helped narrow down regional CSS decline to 3% for the full year. Sales in our wholesale markets through franchisees decreased by 14%, primarily due to net closure of stores. This was the result of weakened consumer demand from depreciated local currencies against a strong United States dollar. In April last year, the Group completed the acquisition of Kuwait and Qatar operations, and has consolidated sales from these operations since the completion date. Without consolidation, sales would have decreased by 4%. At constant exchange rates, despite sales were down by 2%, gross profit was flat YOY. Gross profit margin was up by 1.3 percentage points, primarily due to improved product mix from high-margin products. The increasing rental expense slightly deleveraged the operating results, which recorded a decrease of 4% YOY. Management will continue to enhance operating efficiency to combat the adversity there and will seek to expand our footprint when the economy turns the corner. Chart 10: The Middle East quarterly CSS and CSGP change 1 7% 7% 7% 5% -1% 4% 1% 7% 3% 3% -5% -2% -7% -7% -1-11% -8% -15% -12% -15% 1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016 4Q 2016 CSS change CSGP change 21

South Korea (a joint venture) Table 13: Overview of South Korea Full Year Second Half First Half (In KRW million) 2016 2015 Change 2016 2015 Change 2016 2015 Change Total sales 215,037 218,007 (1%) 113,518 115,543 (2%) 101,519 102,464 (1%) CSS (4%) (3%) (6%) 1% (2%) (6%) Gross profit 119,822 118,555 1% 63,452 62,065 2% 56,370 56,490 Flat Gross profit margin 55.7% 54.4% 1.3pp 55.9% 53.7% 2.2pp 55.5% 55.1% 0.4pp CSGP (1%) (7%) (2%) (3%) Flat (9%) Net Profit 12,641 11,749 8% 7,197 6,705 7% 5,444 5,044 8% Share of profit (% of equity holding: 48.5%) 6,131 5,698 8% 3,491 3,252 7% 2,640 2,446 8% Number of stores at period end 200 198 2 195 200 (5) South Korea, a 48.5% joint venture under an independent management team, registered a 4% decrease in CSS and 1% decline in CSGP. Gross profit margin was up by 1.3 percentage points. This was after an extended period of unusually low gross profit margin particularly in the second half of 2015 when the Middle East Respiratory Syndrome broke out. South Korea underwent inventory rationalization during the year under review and had HK$62 million less inventory on December 31, 2016 compared with December 31, 2015. Its inventory turnover days also fell from 105 days to 80 days for the year ended December 31, 2016. The depreciation of the Korean Won ( KRW ) against HKD continued to lower our share of profit there. Our share of profit rose by 8% in local currency terms, but only increased by 3% at current exchange rates. Going forward, management expects that South Korea will further enhance product margins from leveraging the Group s sourcing power. Chart 11: South Korea quarterly CSS and CSGP change 5% -5% -1-11% -1% -3% -7% 3% -1% 2% -1% -3% -4% -4% -8% 2% -5% -15% -2-17% 1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016 4Q 2016 CSS change CSGP change Group wholesales to overseas franchisees and non-consolidated entities Table 14: Store number of overseas franchisees and non-consolidated subsidiaries By market December 31 2016 At December 31 2015 South Korea 200 198 Myanmar 111 112 Philippines 76 68 Vietnam 28 25 Japan 10 9 Other markets 5 4 Total number of stores 430 416 Total retail floor space (sq. ft.) 485,200 455,700 22

Wholesale sales fell by 16% to HK$304 million (2015: HK$364 million), primarily due to reduced purchases from South Korea which underwent inventory rationalization. Elsewhere, the Philippines, Myanmar and Vietnam have collectively registered 2 sales growth and the Group s wholesale sales to these markets increased by 1. Management will continue to support the growth of our overseas franchise network. FINANCIAL CONDITION Free cash flow from operations Free cash flow from operations is essential to create shareholder value and this has been a constant key performance indicator internally. During the year under review, free cash flow from operations was HK$505 million (2015: HK$644 million). The high level of free cash flow from operations in year 2015 was to some degree exceptional due to timing difference in settlement with suppliers. The cash conversion rate, which measures our ability to convert reported profit into cash and calculated by dividing free cash flow before taxes paid of HK$619 million to EBIT, was 10 (2015: 12). Net cash and bank balances at HK$1,095 million, increased slightly from last year year-end (2015: HK$1,076 million). During the year under review, we added HK$298 million short-term bank loans denominated in HKD to leverage interest rates differential among banks in the region for yield enhancement. Management considers the current cash and bank balances and free cash flow from operations sufficient to support our business operations and fund our growth and initiatives. Table 15: Free cash flow from operations (In HK$ million) 2016 2015 EBIT 622 609 Depreciation and amortization 126 134 Capital expenditure less disposals (100) (83) Share of pre-tax profit of joint ventures/associates (net of dividends) (21) (18) Changes in working capital 112 Decrease in rental deposits and repayments less amortization 1 19 Others (9) (40) Tax paid (114) (89) Free cash flow from operations 505 644 Table 16: Analysis of change in cash and bank balances (In HK$ million) 2016 2015 Cash and bank balances at beginning of the year 1,076 915 Free cash flow from operations 505 644 Addition of bank loans 298 Dividends paid to shareholders and non-controlling interests (477) (470) Acquisition of Kuwait and Qatar operations 16 Proceeds from issuance of new shares 2 3 Exchange difference (11) (32) Cash and bank balances at end of the year 1,393 1,076 Financial position Property, plant, and equipment During the year, we increased capital expenditure by HK$6 million to HK$104 million (2015: HK$98 million) on the addition of stores and store upgrades. Management will continue to invest in our shop ambiance as when we strengthen our brand image. 23

Goodwill and put option liabilities The goodwill and put option liabilities arose from the acquisition of the Middle East operations in year 2012. We performed annual impairment test and considered there was no impairment to the goodwill. Interests in joint ventures The balance in HK$480 million represents our interest in the 48.5% joint venture in South Korea. The decrease in balance by HK$23 million during the year under review was due to share of profit for the year of HK$43 million, offset by dividends received of HK$33 million and currency translation difference of HK$33 million. Leasehold land and rental prepayments At December 31, 2016, leasehold land and rental prepayments decreased by HK$9 million to HK$243 million (2015: HK$252 million), mainly attributable to additional rental prepayments of HK$59 million, offset by amortization of HK$67 million. Inventory Inventory control is a key indicator of merchandising efficiency and remains a core competence of the Group. Group inventories at December 31, 2016 dropped by HK$44 million or 9% to HK$447 million (December 31, 2015: HK$491 million). During the year, ITOC days closed at 78 days, same as last year. The Group responsibly monitors inventories at our suppliers and Mainland China franchisees as well as our own consolidated inventories (collectively, the system inventory ). Although inventories at suppliers and Mainland China franchisees are not our legal liabilities, this discipline ensures that we do not build up off-balance sheet inventories. The system inventory was down by 12% compared to December 31, 2015, in spite of bulk production and stockholding by suppliers of core items. Table 17: System inventory (In HK$ million) December 31 2016 At December 31 2015 Inventories held by the Group 447 491 Inventories held by franchisees in Mainland China 88 75 Finished goods at suppliers (not yet shipped) 20 67 Total system inventory 555 633 Trade receivables and payables The Group monitors the recoverability of trade receivables to mitigate bad debt risk. Trade receivables turnover days for the year ended December 31, 2016 was 54 days, increased by 3 days compared to last year. Trade receivables past due more than 90 days represents 7% of trade receivables, same as 2015 year-end. Trade payables turnover days in the year under review was 37 days (2015: 38 days), which was comparable to the normal credit period of 30-45 days. 24